France-headed global multi-energy major TotalEnergies SE, and Vanguard Renewables, a leading US farm-based organics-to-renewable natural gas (RNG) production and a portfolio company of BlackRock Real Assets, have signed an agreement to create an equally owned joint venture (JV) to develop, build, and operate "Farm Powered" RNG projects in the United States.
TotalEnergies is a leading company in the European biogas segment with a production capacity of 1.1 TWh and aims to become a major player in this segment across several key markets, particularly in Europe and the United States by joining forces with leading partners such as Clean Energy Fuels, and Veolia, to reach its objective of producing 10 TWh of biomethane by 2030.
It is active across the entire value chain, from project development to marketing of this renewable gas and its byproducts, including biofertilizers and bioCO2.
Advance 10 RNG projects
TotalEnergies and Vanguard Renewables will advance 10 RNG projects into construction over the next 12 months, with a total annual RNG capacity of 0.8 TWh (2.5 Bcf).
These are based on a model of waste materials recovery from the food and beverage industries, supplemented with dairy manure from dairy farms.
The anaerobic digesters will be built on the dairy farms themselves which will then recover and manage the digestate as a low-carbon and nutrient-dense fertilizer.
The three initial projects in this agreement are currently under construction in Wisconsin (WI) and Virginia (VA), each with a unit capacity of nearly 75 GWh (0.25 Bcf) of RNG per year.
Beyond these first 10 projects, the partners will consider investing together in a potential pipeline of about 60 projects across the country for a total capacity of 5 TWh (15 Bcf) per year.
TotalEnergies is pleased to partner with BlackRock and its portfolio company Vanguard Renewables, to accelerate the development of food biowaste processing into renewable natural gas in the United States. By expanding into this fast-growing market, our joint venture will create value for both companies while benefiting the food and farming sectors as well as providing a ready-to-use solution to industrial companies willing to decarbonize their energy supply. This joint venture is a new step for TotalEnergies in achieving its objective to produce 10 TWh of renewable natural gas by 2030, said Olivier Guerrini, VP of Biogas at TotalEnergies.
Key RNG player in the United States
Headquartered near Boston, Massachusetts (MA), Vanguard Renewables was founded in 2014 and has a workforce of approximately 260.
The company currently operates 17 organics-to-renewable energy facilities with an annual capacity of more than 440 GWh (1.5 Bcf) of RNG. Looking beyond 2024, Vanguard Renewables plans to commission over 100 RNG projects by the end of 2028.
In July 2022, Vanguard Renewables was acquired by BlackRock, through a fund managed by its Diversified Infrastructure business (BlackRock).
BlackRock has partnered with Vanguard Renewables’ management team to build upon the company’s market-leading track record to drive the next phase of its growth to support the nationwide expansion of its anaerobic digester (AD) projects from coast to coast.
BlackRock will remain the majority shareholder of Vanguard Renewables.
We are thrilled to welcome TotalEnergies as a strategic partner, building on our mission of developing farm-based organics-to-renewable natural gas projects across the United States. This collaboration validates Vanguard’s leadership position in the RNG space in the United States and brings together our expertise with TotalEnergies’ extensive experience in large-scale energy development, safety procedures, and global partnerships. These 10 RNG projects, jointly undertaken by TotalEnergies and Vanguard Renewables as co-investment partners, further reinforce our commitment and ability to deliver on our mission of harnessing the power of waste to decarbonize our planet, stated Neil H. Smith, CEO at Vanguard Renewables.
A robust partnership
The joint venture will benefit from the expertise of both companies:
Thanks to its experienced teams and development platform, Vanguard Renewables will contribute to the JV with its ready-to-build projects at scale. It will also manage feedstock supply, assets, operations, and RNG sales.
Leveraging its strong position in the European market, especially in France and Poland, TotalEnergies will bring to the JV its industrial expertise, providing technical support on the design and engineering of the facilities, and the plant’s operational performance.
TotalEnergies and Vanguard Renewables will market the RNG through long-term purchase agreements with buyers actively engaged in the decarbonization of their industrial processes.
This exciting partnership brings together TotalEnergies’ global experience in scaling and operating renewable gas assets with Vanguard Renewables’ market-leading position in the United States, extensive operational history and customer relationships, and robust project portfolio. With TotalEnergies as a strategic partner, Vanguard Renewables will be positioned to achieve even stronger growth and continued success, said Doug Vaccari, Managing Director, Diversified Infrastructure, BlackRock.
Transforming food waste
To feed its digesters, Vanguard Renewables has established a major network of leading food industry brands across the US and the groundbreaking Farm Powered Strategic Alliance, which gives Alliance members preferred access to recycle their organic waste generated from manufacturing or retail activities and the potential opportunity to purchase the renewable energy generated at a Vanguard Renewables’ facility.
The Alliance’s members include multi-national corporations across several verticals, including leading food, beverage, and pharmaceutical manufacturers.
In anticipation of the Company’s growing portfolio of anaerobic digesters Vanguard Renewables has expanded its food and beverage diversion services and organics solutions team to provide service throughout the contiguous United States.
The transaction completion is subject to customary conditions precedent.
